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Investing for Retirement: How Do You Compare?

Image: Strategies Americans are using for retirement planning when it comes to the accounts they are saving in, their investments, and what investment guidance they seek.

When it comes to gauging retirement preparedness, do you have a good sense of whether your savings are on track to fund the retirement life you envision? Realistically assessing your progress on the road to retirement is a key step in achieving your goals. But it can be challenging to pinpoint an accurate target—and even tougher to predict the future.

Looking for some benchmarks? Follow along as we explore key findings of a national poll conducted by Kiplinger’s Personal Finance and wealth management firm Personal Capital. We surveyed 1,014 investors between the ages of 35 and 64, equally divided between men and women, to reveal some common measures of retirement readiness.

This is part two in our series “Are You Retirement Ready?” For part one “Retirement Savings by Income,” click here. Stay tuned for future chapters, including future security and retirement living.

But this week, we’ll focus on how Americans are thinking about investing for retirement.

Are You Confident That Your Current Portfolio Is Enough?

Financial confidence runs high among those we polled when it comes to planning for secure financial futures. A majority (65%) say they’re confident they’ll retire comfortably with what they have saved so far or plan to save.

There are several reasons for this level of self-assurance, but preparation seems to lead the way. For example, 73% have a financial plan in place.

Furthermore, 52% are currently seeking professional guidance regarding retirement planning, whether it be from a broker, money manager, commission-based planner, fee-only planner or a friend or family member. And nearly half have a plan for how they’ll withdraw savings during retirement.

Bear Market Defense

Despite the overall optimism, a majority of respondents say they are worried about the impact of a market slump before (61%) or during (62%) retirement.

To prepare for a downturn, most respondents say they are planning to simply stay diversified and “wait it out.” Others say they are going on the offensive with actions like these:

  • Consulting with a financial professional
  • Shifting to more defensive stock sectors
  • Investing more heavily in bonds and/or cash
  • Purchasing an annuity to provide guaranteed income
  • Raising cash to snap up bargains

bear market retirement

Getting Trusted Guidance

Whether you’re looking to hire an investment professional for the first time, or if you’re looking at alternatives to a current advisor, getting the conflict-free information you need to make smart decisions about managing your wealth is critical. Personal Capital advisors always act as fiduciaries, which means they are legally bound to act in your best interests.

Review these eight questions to vet potential advisors.

How Often Do You Check Your Investments?

Perhaps you only review your retirement accounts once a year; maybe you assess your progress even less often.

If so, you’re missing opportunities to course correct. Things can change quickly and checking regularly allows you to periodically rebalance your portfolio. This ensures you have the appropriate asset allocation for your risk tolerance and time horizon.

Receive a free, no-obligation Portfolio Review from a fiduciary professional.

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